IFRS for Small and medium-sized enterprises: Activity 1

You recently joined a dynamic team of accountants in an accounting firm, Professional Accountants
Inc, based in Durban. As a newly qualified Financial Accounting Diploma Student, the manager of the
accounting firm requested you to provide guidance on the two newly acquired clients.

Client 1: Moleji (Pty) Ltd

Moleji (Pty) Ltd is a manufacturing firm based in New Germany, inland from Durban. The following is
an extract from the information that was provided to Professional Accountants Inc. for the financial
year ending 30 June 2022:

Total revenue generated during the financial year R101 360 000
Number of employees during the financial year 182
Total Liabilities R65 401 000
Number of shareholders during the financial year 14
Securities are not publicly traded as per the MOI

Client 2: Cyber Ltd

Cyber Ltd is a company that provide cyber security services. The company’s Memorandum of
Incorporation allows it to offer securities to the public and these securities are transferrable. The
company is not listed on any exchange. The company shares are currently traded over-the-counter
market as the company is not listed. Turnover generated during the year ending 30 June 2022
amounted R260 million and there were 350 full-time employees.

Your manger has requested you to provide guidance on the following:

• Please advise if these clients qualify as Small Enterprises in terms of National Small Enterprise
Act 102 of 1996 as amended.
• These clients requested guidance on whether their financial statements should be audited or
independently reviewed. Please also provide the public interest score calculation where
possible.
• Advise if these companies qualify as small and medium-sized entities (SMEs) in terms of IFRS for
SMEs.
• Please provide guidance on the appropriate accounting standards that should be used by these
clients when preparing financial statements.
• Please provide explanation on the following standards, who can use them and who issues each
of these standards:
GRAP
GAAP
IFRS
IFRS for SMEs
Modified Cash Standards.

Prepare a report to your manager with a brief motivation on each of the queries that you are
required to provide guidance on. Use appropriate communication method on your report.

The report is due on Monday 25 July 2022 no later than 8am. Please submit on Ms Teams. This is
going be considered when calculating the term mark (Only under exceptional circumstances).
Consider the Companies Act 71 of 2008, Companies Regulations 2011, IFRS for SMEs etc.